European businesses were last week urged to step up measures to curb water use as the European Commission's Environment Minister Stavros Dimas warned that water bills were likely to rise, as the continent attempts to adapt to the increased risk of water shortages.

Speaking at a conference in Zaragoza, Spain, Dimas observed that while areas such as the Mediterranean were already facing serious water stress, as much of 44 per cent of the water supplied in the region is still wasted. He warned that this was "unsustainable" and that the only way to ensure water is saved is for EU governments to act to "ensure people pay for what they use".

Hinting strongly at the possibility of new taxes designed to drive up the cost of water Dimas said that "if someone who lives near the sea has a swimming pool, then they will have to pay more. It is only logical to tax more heavily those who can afford to have a swimming pool, when they could just as easily swim in the sea".

He added that similarly, businesses opening a golf course in an area facing water shortages should be made to pay more for the water they use.

Dimas was speaking ahead of the publication of a new EU report on water policy that is expected to be published before the end of the year. The report, which follows a study by the European Commission that argued that water use could be cut by 40 per cent through the adoption of water saving technologies alone, is expected to outline how the EU plans to ensure water meters are more widely adopted.

The commissioner's comments are the latest in a line of warnings that water bills are likely to increase in the coming years.

Last month, UK water utilities outlined plans for above inflation price rises between 2010 and 2015, primarily to meet rising infrastructure costs arising from the need to limit the removal of water from overstretched waterways and prepare for the increased drought risks associated with climate change.

Barrie Clarke, communications director at trade association Water UK, agreed that water companies would face pressure to increase investment in new infrastructure, but he downplayed fears that water bills would soar. "We wouldn't agree that the era of affordable water is over," he said. "We can meet the challenges of climate change while keeping water affordable as long as we have right policies in place and invest wisely in managig water supply and demand."